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Unit 12Export ControlChapter 4: The development of arms and dual-use export control instruments by and through the European Union
All chapters
  1. 1. Introduction
  2. 2. Multilateral instruments and standards for arms export controls
  3. 3. Multilateral instruments and standards for dual-use export controls
  4. 4. The development of arms and dual-use export control instruments by and through the European Union
  5. 5. The national implementation of export controls
  6. 6. Summary and reflections on the future of export controls
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Chapter 4

The development of arms and dual-use export control instruments by and through the European Union

This Chapter provides an overview of the process that led to the establishment of the EU export control framework and elaborates on the functioning of some of its key components

The EU Common Position

Although EU treaty law always exempted issues related to arms export control and security and defence from its provisions, in the early 1990s a series of factors created a suitable context for the development of common standards and greater convergence in this field:1

  • Efforts to consolidate the EU arms industry prompted calls for further convergence in EU member states’ licensing systems
  • A series of scandals implicating European companies in illegal or irresponsible transfers of arms and dual-use items led some EU member states to adopt stricter export controls
  • The increased international interest in conflict prevention, human rights and international humanitarian law (IHL) in states’ foreign policies led to calls for these standards to be reflected in their export controls
  • The adoption of the Common Foreign and Security Policy (CFSP) in 1993 and the European Security and Defence Policy (ESDP) in 1999 created both the legal basis and the framework to pursue further convergence in arms export controls

As a result, in 1998, EU member states adopted the EU Code of Conduct on Arms Exports, which provided common standards regulating the export of military goods. In 2008, the Code of Conduct was turned into the EU Common Position 2008/944/CFSP on Arms Exports2. Although the EU Common Position is legally binding for all EU member states, since it is a CFSP instrument, member states are free to determine the means of its application at the national level and EU institutions have no power to sanction noncompliance. However, the EU has been assuming a more prominent position in arms export policy and related export control instruments since the establishment of the European Peace Facility (EPF) in 2021.

The EU Common Position contains eight criteria. These outline four sets of risks (criteria 1–4) that member states are required to treat as grounds for denying an export licence, and four sets of factors (criteria 5–8) that states are required to ‘take into account’ when assessing an export licence application. The list of items that are subject to control are outlined in the EU Common Military List (CML), which is based on the control list of the Wassenaar Arrangement. In order to assist member states in their implementation of the EU Common Position and the application of the criteria, EU member states developed and maintain a dedicated User’s Guide.3

The EU Common Position also contains transparency and reporting obligations. In particular, EU member states are required to submit data to the European External Action Service (EEAS) for the compilation and publication of an annual EU report on arms exports (which is also available as an online searchable database), and to publish national reports on their arms transfers.

Overview of the eight criteria of the EU Common Position

  1. Respect for the international obligations and commitments of member states, in particular the sanctions adopted by the United Nations Security Council or the restrictive measures adopted by the European Union, agreements on non-proliferation and other subjects, as well as other international obligations
  2. Respect for human rights in the country of final destination as well as respect by that country of international humanitarian law
  3. Internal situation in the country of final destination, as a function of the existence of tensions or armed conflicts
  4. Preservation of regional peace, security and stability
  5. National security of member states and of territories whose external relations are the responsibility of a member state as well as that of friendly and allied countries
  6. Behaviour of the buyer or recipient country with regard to the international community, in particular its attitude to terrorism, the nature of its alliances and its respect for international law
  7. Existence of a risk that the military technology or equipment will be diverted within the recipient country or re-exported under undesirable conditions
  8. Compatibility of the exports of the military technology or equipment with the technical and economic capacity of the country of final destination, taking into account the desirability that states should meet their legitimate security and defence needs with the least diversion of human and economic resources for armaments.4

The establishment of the European Peace Facility

The European Peace Facility (EPF), an off-budget mechanism established under the CFSP in March 2021, provides funding for EU external actions in the field of crisis management and conflict prevention that have military and defence implications. These actions can encompass assistance measures to strengthen the military and defence capacities of third states, including through the supply of lethal military materiel (i.e. weapons). This represents the first time that resources pooled and coordinated at the EU level can be used to fund arms transfers. The EU, through the EEAS, has a key role in the implementation of EPF assistance measures which also entails conducting export control-related activities, such as a preliminary assessment of the risks that arms transfers can generate (including the risks of diversion and misuse) and conducting on-site verifications in the recipient country.5

The EU Dual-Use Regulation

The EU is currently the only regional organisation with a common legal framework for export controls on dual-use items. The EU Dual-Use Regulation covers controls on the export, re-export, brokering, transit and transshipment of dual-use goods, software and technology. It is a directly applicable law in EU member states, but each member state implements and enforces the regulation through their respective national export control system. This means that while there is a common legal framework, all licensing assessments and decisions are left to the member states. It also means that there can be a certain degree of variation in how certain provisions are interpreted and assessments are conducted.

Following the creation of the single market in 1993, the EU first introduced a community regime for export controls on dual-use items in 1994, to ensure harmonisation of export control practices, while eliminating such controls for intra-community trade. The legislation that set up the EU’s regime for export controls was subsequently repealed or recast several times in line with major steps in European integration and the allocation of exclusive and shared competences.

Most recently, the EU Dual-Use Regulation was recast as Regulation (EU) 2021/821. It implements the guidance provided by the multilateral export control regimes, and it combines the regimes’ control lists (with a small number of additions) into one unified list of dual-use items. The regulation also includes several catch-all provisions that apply to exports of non-listed items where the exporter is aware or has been informed that they are or may be used for a proscribed nuclear, chemical or biological weapon end-use, or a military end-use in a destination under an arms embargo. Additional catch-all mechanisms may apply to certain non-listed cyber-surveillance items, or non-listed items – including emerging technologies – for reasons of public security or the prevention of terrorism and human rights violations.6

How the EU dual-use list works

Source: Grübelfabrik, CC BY-NC-SA

The Intra-Community Transfers Directive

While the EU Common Position establishes common standards on military exports to recipient countries outside of the EU, the ICT directive covers the transfer of defence-related products within the EU.

The ICT directive was adopted in 2009 and entered into force in 2012. Its implementation is overseen by the European Commission and it forms part of the EU’s internal market, which is a shared EU competence. This means that while its provisions are binding and the EU is able to sanction noncompliance, EU member states can decide how to implement them internally7. The ICT directive was adopted to remove barriers to European defence industry cooperation by enabling EU member states to follow simplified export licensing procedures for the transfer of defence-related products within the EU. However, many EU member states have retained existing restrictions and the set of items covered by them has varied across the EU which has limited the potential impact of the ICT directive.

EU restrictive measures

The EU can adopt what it refers to as ‘restrictive measures’ towards third countries, entities or individuals to respond to certain activities or behaviours that are in violation of the EU’s values and objectives. These restrictive measures include arms embargoes but also other forms of sanctions, such as economic-related measures (EEAS, n.d.).

EU arms embargoes are adopted by the Council of the EU and either reproduce or expand upon embargoes imposed by the UN Security Council or are entirely stand-alone measures. While EU embargoes typically cover items in the common military list, they can also encompass dual-use goods and technologies (e.g. the measures adopted in 2022 against Belarus and Russia)8. Unlike arms embargoes issued by the UN Security Council, EU arms embargoes do not come with any mechanism to monitor compliance and implementation. However, in 2023, EU member states decided to increase convergence in the way EU restrictive measures are enforced, including by aligning penalties in cases of violation9.

Beyond traditional export controls: Foreign direct investment screening

(At the time of writing this e-learning unit, the FDI screening regulation is in the process of being revised.)
Some third countries have increasingly been using foreign direct investment (FDI) as a means to acquire rapidly developing technologies – e.g. artificial intelligence technology – which are expected to have significant implications for the capabilities of conventional arms and nuclear, chemical or biological weapons. Foreign direct investment is ‘investment from one country into another (normally by companies rather than governments) that involves establishing operations or acquiring tangible assets, including stakes in other businesses’ and usually also involves other aspects, such as management, know-how, organisational skills and transfer of technology.10

In 2016, several EU member states began raising concerns about the target and origin of the FDI they were observing and started working towards strengthening controls. As a result, in 2019, the EU adopted a regulation establishing a framework for the screening of FDI into the EU. The regulation establishes basic requirements for member states’ FDI screening mechanisms, an obligation to share information and mutual comments on FDI cases under consideration. However, the regulation does not require member states to set up a screening mechanism. Under the regulation, the European Commission can issue non-binding opinions on FDI cases where there are security or public order concerns that could affect specific EU projects and programmes.

Map of the legislative status quo of EU Member States as by 2022The image is a color-coded map of Europe titled Member States with screening mechanism/legislative activities, produced in June 2022. It displays the status of screening mechanisms across EU member states, using four different colors to indicate their status.
  • EU Member States with a screening mechanism
  • EU Member States with a screening mechanism in the process of updating the existing one
  • EU Member States without a screening mechanism, considering, planning or in the process of adopting one
  • EU Member States without a screening mechanism, and without any developments aiming at setting up one

    • Map of the legislative status quo of EU Member States as by 2022

    Based on European Commission, Second Annual Report on the screening of foreign direct investments into the Union {SWD(2022) 219 final}, p.8. Graphic: PRIF

    Licensed under CC BY 4.0.

    Quiz

    Footnotes

    1. Bromley, Mark. 2012. “The Review of the EU Common Position on Arms Exports: Prospects for Strengthened Controls”, EU Non-Proliferation Papers, No. 7, January 2012, EU Non-Proliferation Consortium ↩

    2. Council Common Position 2008/944/CFSP of 8 Dec. 2008 defining common rules governing control of exports of military technology and equipment, in: Official Journal of the European Union, L335. 8 Dec. ↩

    3. https://data.consilium.europa.eu/doc/document/ST-6881-2025-INIT/en/pdf ↩

    4. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=LEGISSUM:4391701 ↩

    5. Maletta, Giovanna./Héau, Lauriane. 2022. “Funding Arms Transfers Through the European Peace Facility: Preventing Risks of Diversion and Misuse”, Stockholm: SIPRI ↩

    6. Bromley, Mark/Brockmann, Kolja. 2021. “Implementing the 2021 recast of the EU dual-use regulation: challenges and opportunities”, EU Non-Proliferation and Disarmament Papers, No. 77, September, EU Non-Proliferation and Disarmament Consortium ↩

    7. Bromley, Mark. 2018. “Arms Transfers and Export-Control Policies”, in: Meijer, Hugo/Wyss, Marco (eds): The Handbook of European Defence Policies and Armed Forces. Oxford Academic ↩

    8. European External Action Service. n.d. “Frequently asked questions: Restrictive measures (sanctions)”. https://ec.europa.eu/commission/presscorner/detail/en/qanda_22_1401 ↩

    9. Stockholm International Peace Research Institute (SIPRI). n.d. “Arms embargoes”, available at: https://www.sipri.org/databases/embargoes ↩

    10. Council of the EU. 2023. “EU sanctions: Council finalises position on law that aligns penalties for violations”, 9 June ↩

    The EU Non-Proliferation and Disarmament eLearning Course aims to cover all aspects of the EU non-proliferation and disarmament agenda. It's produced by PRIF with financial assistance of the European Union. The contents of individual learning units are the sole responsibility of the respective authors and don't necessariy reflect the position of the European Union.